The rich will flee if taxed? Not really, MPR report says

MORNING EDITION

Not that those making the argument are all that interested in statistics or first-hand experience, but MPR’s Tom Scheck serves up another reminder that constant assertions that “all our millionaires will leave” if they’re hit with with a new top-tier tax isn’t exactly supported by reality. Says Scheck: “Groups have argued that one-third of that state's wealthiest residents disappeared from the tax rolls after Maryland increased the income tax rate in 2008. Conservatives say wealthier residents left the state to avoid paying the tax. An official with Maryland's Department of Revenue disagrees with those claims. He says the dropoff was more likely related to the economic downturn, and that there were fewer people earning enough money to make it into the higher tax bracket. In New Jersey, researchers examined tax data to see whether a 2004 income tax hike on top earners had an impact on migration. ‘Tax rates just don't make a big difference in what they decide to do in terms of where they're going to live’, said Charles Varner of Princeton University, one of the researchers. Varner and a colleague at Stanford University examined the tax returns of New Jersey residents between 2000 and 2007, including those who earned more than $500,000 a year and had to pay the higher tax starting in 2004. He said they found little difference in migration, based on who was paying the new higher taxes.” But then New Jersey doesn’t exactly have South Dakota next door.

Nevertheless, freshman Republican Sen. Paul Gazelka writes in an opinion piece for the Brainerd Dispatch: “The negative impact of Gov. Dayton’s plan is amplified by the fact that neighboring states as well as the majority of states across the U.S. are taking measures to reduce spending and cut taxes. States like Wisconsin have been taking steps to attract job creators by lowering taxes. Democrat governors, including Andrew Cuomo in New York, are proposing common sense budgets that do not include higher taxes. Gov. Dayton is making Minnesota an island of higher taxes, putting Minnesota businesses and job creators at a fundamental disadvantage.”

Kevin Diaz of the Strib files a piece on a conference call with Gov. Dayton who was in D.C. Thursday: “[T]the new DFL governor said Republicans in the Minnesota Legislature are “in some kind of denial” about property tax increases that have resulted from cuts in local government aid. ‘They continue to be in denial over the direct impact of decisions made in St. Paul on property tax increases’, he said. ... While his tax proposal would spare all but the top 5 percent income bracket, Dayton said, Republican policies would result in across-the-board property tax increases, which he called a ‘regressive, unfair tax on everybody.’ ‘The time for this rhetorical game playing is over,’ Dayton said. ‘I’ve submitted my budget, and now it’s their responsibility to develop their budget. Where is their budget’?” Uh ... maybe ... the dog ate it?

There’s an amusing piece by Mike Christopherson in the Crookston Times comparing the negotiating styles of Dayton and President Obama. “In his first budget proposal released as governor, [Dayton] asked for somewhat more than he thinks he’s going to get. He created a new tax bracket for the wealthiest Minnesotans, and seeks to erase about half of the state’s $6.2 billion deficit through the new tax revenue. He leaves state aid to cities and counties alone. He increases education funding. ... Dayton’s never going to get all that. But, by including what he did in his first proposal, you can bet he’s going to get some of it. Can you imagine, after eight years of Tim Pawlenty essentially not even allowing anyone to utter the phrase ‘tax increase,’ some of Minnesota’s wealthiest people actually paying more in taxes? It’s almost impossible to fathom. But that’s Dayton’s starting point for negotiations, and the Republican-controlled legislature won’t be able to talk him out of all of it. Obama? You’d love to buy a house from the president, because he asks for less than he thinks he’s going to get. On most of the major pieces of legislation he’s sought, healthcare reform being the obvious example, he sets the bar low from the get-go. He talked in the campaign about a single-payer healthcare system, then scaled it back to a system with a ‘public option,’ then scrapped that early on, too. Then Republicans made that sound like socialism anyway, just to rub it in.”

It’s uber-lefty, but in terms of grist for discussion/brawling, writer Lisa Graves, on the Center for Media and Democracy’s “PR Watch” blog, serves up her reporting on the influence of the billionaire Koch brothers on Wisconsin Gov. Scott Walker: “Walker was elected just over three months ago on the heels of an exceptionally expensive gubernatorial race in the Badger State, fueled by groups funded by the Koch brothers, David and Charles. David Koch, the son of a radical founding member of the John Birch Society, which has long been obsessed with claims about socialism and advocated the repeal of civil rights laws, personally donated $1 million to the Republican Governors Association (RGA) in June of last year. This was the most he had ever personally given to that group. (Fellow billionaire Rupert Murdoch matched Koch's donation to the RGA with a $1 million donation from his company News Corporation, parent company of FOX "News" Channel.) RGA in turn spent $5 million in the race, mostly on TV ads attacking Walker's political opponent, Democratic Mayor Tom Barrett. ... All told, RGA ran 8 TV ads and sent 8 pieces of mail for absentee, early voting, and GOTV, totaling 2.9 million pieces."

The Edina teacher hurt in a scuffle with a first-grader, and then suspended for telling other parents about the incident, has accepted a $100,000 settlement. The Strib’s Mary Jane Smetanka writes: “According to accounts given by an attorney who previously represented York, the case began when a first-grade boy pushed a classmate into a desk. York sent the other children out of the room as she tried to deal with him. The situation grew more heated, and York lifted a chair to try to fend off the boy, who pushed her. York sprained her back and neck and was on sick leave when the district put her on administrative leave for sharing what had happened with parents. It said the communication had violated state privacy laws.”

Speaking of the Strib, just when you thought it was out of the business of deep thinking on any issue beyond the St.Croix, it serves up an editorial arguing for international action to hasten the departure of Moammar Gadhafi: “The U.N. Security Council should immediately impose the most severe economic sanctions against Libya and as many of its key leaders as possible. This should include freezing assets of any identifiable Libyan loyal to Gadhafi. And any pending military aid or weapons sales to the country should be halted immediately. Further, Libyan leaders and loyalists should be put on notice that it's not only the Gadhafi family that will face charges from the International Criminal Court. Militarily, the U.N. should impose a no-fly zone in Libya.” Good idea, I guess. But since the United States is invariably the military action provider of first resort, why not just say, “The U.S. should lead the imposition ...”

The Jerry Trooien collateral damage continues to build.Bob Shaw of the PiPress reports: “Aperitif Restaurant in Woodbury will be closing Monday — following last week's announcement that the restaurant's owner is being investigated for fraud. ... Both the restaurant and the [nearby Sheraton St. Paul Woodbury] hotel are owned by the JLT Group. Jerry Trooien, the owner of JLT, declared bankruptcy last fall. The company's St. Paul offices were raided by the FBI last week, in connection with a fraud investigation.”

Indefatigible conservative blogger Mitch Berg, at Shot in the Dark, levels a serious rip job on former Gov. Arne Carlson for: A. Not supporting Tim Pawlenty last fall, and B. Resenting being called a “backstabber” for campaigning for Tom Horner. Says Berg: “Carlson is entitled to his opinion. Of course, his own record is one of a governor who ruled in generally good times; 1990-1998 was a pretty cha-cha time in Minnesota, barring a brief recession early on as the Defense industry retrenched and the Iron Range went through its usual, eternal spasms. The booming economy gave Carlson repeated budget surpluses — which he promptly turned into permanent entitlement spending, which promptly turned into deficit-fodder when times turned tough in 2000 and again in 2008. State government zoomed in size. His own record is that of someone who spent money like a crack whore with a stolen gold card. We, The People of Minnesota, financed his spending spree with a healthy cut off of our take from the good times in this state. Had he governed in tough times — as Pawlenty did, through two recessions — he’d have presided over a California-like collapse, in all likelihood.” Elsewhere, Berg criticizes lefty blogger Sally Jo Sorensen for "name-calling."

Comments (8)

Submitted by Jeff Strate on February 25, 2011 - 9:13am.

Global warming denier, Tea Party sugar daddy and polluter David Koch is one of the major supporters of Nova, the PBS science series produced out of WGBH-TV in Boston. Koch has also funded another popular fountain of scientific gee wizzing at the Smithsonian National Museum of Natural History: The David H. Koch Hall of Human Origins. Google searches will point readers to the source materials.

This is our chance to *gain* on other states, not lose ground to them. As they let their infrastructures and education systems crumble and allow their wealthy to make off like bandits, Minnesota can invest its way to prosperity - like it's done for a hundred years.

If Governor Carlson had presided over Minnesota in "tough times" as Pawlenty did? Actually Governor Pawlenty presided in Minnesota over very GOOD times, but ran the state in ways guaranteed to produce a budget crisis when the economy slowed down (which, of course, it always does) while steadfastly resisting all efforts of the Democratic legislature to be more responsible in preparing for what would inevitably be coming.

The current budget crisis is NOT because of the "tough times" we're in. It is because former Gov. Pawlenty refused to put plans in place which would have smoothed our path through tough times, in order to protect his fabulously wealthy friends (and the tender, tax-phobic sensitivities of their sycophants) and, thereby proved that he never cared in the least for average citizens, or worried that the state government would not be in a strong enough position to be able to help its citizens weather the times we are now in. In fact, he made sure this would be the case.

I certainly have not always loved former Gov. Carlson, but I daresay that if he had been presiding during the Pawlenty years, he would have worked, as did former Gov. Quie, to implement modest (and likely temporary) tax increases which would not have harmed anyone, but would have left our state without our current deficit crisis, a crisis which former Governor Pawlenty after very willfully and purposefully creating, ran out on, leaving his former Republican colleagues holding the bag (and when are they EVER going to figure out what he did to them?).

As for President Obama's style of negotiating, it's clear that he doesn't understand enough psychology to realize that his assumption that the Republicans in Congress are functional enough to be reasonable and to be able to negotiate in good faith are incorrect.

Many if not most of them are NOT fully functional. For them, yielding anything in compromise is the same as losing. As we shall soon see, they will be more than willing to shut down the federal government for a long period of time rather than yield a tenth of an inch in any kind of budget compromise.

Of course, on the other hand, I may be wrong and he may actually be planning to take advantage of their dysfunctions by, as the old saying goes, "handing them enough rope to hang themselves with;" expecting to stand by and watch the healthier, more moderate Republicans and the "Tea Party" Republicans tear each other and the GOP apart.

It seems that for the GOP, the "job creators" are the new Lords and Dukes of the Realm. They should start wearing funny hats and we could all bow before them. "Because we say so" should be enough justification for ending programs that put food on the table and health care within reach for the commoners. The GOP has been watching "The Tudors" and thinking "Ah, the good old days!"

It could very well be that Minnesota rich people will stay around and pay higher taxes....they might be like the rest of us....and simply like it here no matter what the taxes are.

But in general, everyone likes living and doing business at a cost that gives them the most value for their buck. Don't be so sure that rich people are any different than us poor people....in other words, nobody likes to pay taxes that have no personally assessed value to them. People like to call those kinds of taxes "high", and they may just up and move! If rich people love paying taxes so much, why do we have to intice them with Tax Increment Financing, stadiums that are publicly financed, JOBZ programs, etc...

We all have our financial breaking points. Do not just assume people will stay and pay "high" taxes.